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Murdoch, Berlusconi team up for pay TV service

Become partners for German Premiere service

COLOGNE, Germany -- Teaming up seems to be the strategy of choice when it comes to the Euro pay TV game.

Rupert Murdoch and Italian Prime Minister/mogul Silvio Berlusconi are now partners in Germany's Premiere pay TV service after Berlusconi's Fininvest holding company acquired a 3.1% stake in Premiere, a deal first made public Monday.

A few countries over, Spain's Telefonica and French media giant Vivendi are reportedly mulling a possible joint bid for Digital Plus, the satellite pay TV business being sold by Spanish media group Prisa in order to pay off debt.

Both Berlusconi and Murdoch were initially in the running for Digital Plus but News Corp.'s British pay operator BSkyB has since pulled out of the bidding and interest from Berlusconi's Mediaset appears to have waned.

Digital Plus is arguably a better fit for Telefonica, which hopes to add the group's 2 million satellite subscribers to those of its own broadband pay TV service, Imagenio. A joint bid with Vivendi could help appease European anti-trust authorities.

Berlusconi's move into Germany has sent Premiere shares rocketing, with investors speculating on a possible takeover of the money-losing pay platform. Premiere shares shot up nearly 40% Monday but fell back a bit a day later, shedding 12% to 3.29 euros ($4.26).

While takeover rumors aren't likely to go away, Premiere's immediate concern is securing the rights to Germany's Bundesliga soccer. Bidding is underway and expected to close by mid-December.

Prisa hopes to announce progress on the sale of Digital Plus in the coming weeks.